Profitability Analysis of Paddy and Locally Milled Rice (oryza sativa L.) Marketing in the Federal Capital Territory, Nigeria

Abstract

The study investigated and compared the profitability of paddy and locally rice marketing in the Federal Capital Territory. Primary data was collected using pre-tested well-structured questionnaires through the adoption of multistage sampling technique. Descriptive statistics (mean, percentage and frequency) were used to analyze data for the socioeconomic characteristics of respondents and constraints of marketing both commodities in the study area while gross margin analysis was used to determine the cost and returns of marketing the commodities. The results for the socioeconomic characteristics of respondents sampled revealed that 61% and 71% of paddy and locally milled rice marketers respectively were between the ages of 31 – 50 years, majority (54%) of the respondents had attained some form of formal education, 74% and 48% of paddy and locally milled rice marketers respectively had over 11years of marketing experience while 75% of paddy rice marketers as against 45% of locally milled rice marketers belonged to a marketing association. The results for cost and returns of marketing the commodities revealed that paddy rice marketers with a total revenue of N59,965and gross margin of N41,711 made 51% more profit that their locally milled rice counterparts with a total revenue and gross margin of N44,646.35 and N20,427respectively. It was also revealed that marketing paddy and locally milled rice in the area were affected by challenges such as high transportation cost, unfavourable government policies, and inadequate and obsolete processing facilities. The study concludes that paddy rice marketing is more profitable in the Federal Capital Territory and thus recommends the formulation and implementation of government policies centered on marketing locally produced rice such as imposition of higher tariffs on importers and traders of imported rice as well as the provision of modern day storage facilities to facilitate storage of paddy rice.